Canada's trucking and logistics industry faces critical labour shortage

Employers need young drivers in it for the long haul

Canada's trucking and logistics industry faces critical labour shortage

Angela Splinter, CEO of Trucking HR Canada, already knew anecdotally that there was a shortage of long-haul truck drivers in the industry, so she was expecting that data when she saw the results of the recently released Labour Market Information National Report.

What Splinter didn’t expect to find in the report, titled The Road Ahead: Addressing Canadas Trucking and Logistics Industry Labour Shortage, was the data outlining the impact the shortage was having on existing employees.

“The level of stress it’s causing current employees within the workplace, that measures just as high as lost sales — clearly that’s fairly significant and something that certainly from an HR perspective we need to pay attention to,” Splinter says. “When we’re looking at already high voluntary turnover rates, if we have a stressed out workforce we’re going to have to manage that because we don’t want to lose the workers we already have.”

According to the findings of the LMI report, the driver shortage has resulted in delayed planned expansions by trucking operators, and “resulted in lost sales in the truck transportation industry by an estimated 4.7% in 2018, equivalent to roughly $3.1 billion in lost revenues.”

Long-haul drivers have, on average, a 9.4% job vacancy rate — a figure that towers above the national unemployment average of 3.3% overall. While truck drivers represent 46% of the industry, they account for 63% of its job vacancies and the total number of those vacancies in Canada has increased over 138% between 2016 and the first three quarters of 2019, to 20,500 from 8,600. The report states that “without meaningful action, vacancies are expected to soar to 25,000 by 2023, an increase of over 25% from 2019.”

Labour market information is one of the strategic areas of focus for the Sectorial Initiatives Program, a grants-and-contributions program from Employment and Social Development Canada. The programs mandate is to “help industries identify, forecast and address human resources and skills issues.” The SIP funds partnership-based projects for key sectors of the Canadian economy, which “are developed and implemented by such industry partners as: workplace organizations, employer associations, education and training bodies, professional associations, unions, and Aboriginal organizations.”

“The challenge we’ve had with our industry is not until a year and a half ago did we even get the ability to access funding to do the labour market information that we need,” Splinter says. “With the work we’ve done now, we’ve documented the driver shortage, we’ve quantified it, we’ve partnered with the Conference Board of Canada. It’s data now that’s accurate, reliable and irrefutable.”

Other emerging key themes in the LMI report include the need to “increase womens participation, develop approaches to effectively reach millennials, and identify best practices that specifically support better recruitment and integration of more diverse labour talent.”

A lot of the action required to address these issues falls onto the already full plates of HR professionals. The report indicates hiring is taking longer than anticipated, and those in HR “are being bogged down with increased recruitment pressures and frustrations,” including pressure to use more innovative strategies to recruit new drivers which leaves less time to focus on current operations.

Splinter says after the LMI report was released, they hosted a Workforce Knowledge Exchange  where industry stakeholders — predominantly HR people — came together to offer feedback on the results and help identify possible solutions for moving forward.

“We’re still compiling that action plan but they’re looking for every kind of approach or practical solution,” she says. “They’re tapped out. They’re exhausting every possible avenue in terms of recruitment. They need support on the retention side as well so we will look at both recruitment and retention, both from a short-term and longer-term perspective, and what they can do as employers — but we also need to look at what we can do as an industry.”

For example, Splinter says since they know young people aren’t exactly lining up to be truck drivers, the industry “as a whole is coming together and we’re launching an industry image campaign” through the Canadian Trucking Alliance.

The hope is that any misconceptions young people might have about the industry can be cleared up. Trucking HR Canada also conducted a connected report, Millennials Have Drive 2, earlier in the year where 2,000 Millennials (aged 18-36) were asked about their perceptions of the industry.

“One of the barriers cited by young people was they have no access to training dollars to pay for the training to become a truck driver,” Splinter says. “That’s something we need governments working with us on because they’re going into other industries where perhaps there are lower barriers to entry or where they’re able to access training dollars, so that has to be a partnership across the board.”

Further, 12% of the respondent sample said they would consider working as a truck driver, and Splinter says that percentage may seem small but it represents 1.1 million young Canadians, indicating there are people the industry’s recruitment efforts could reach. But only 50% of trucking industry employers have formal plans to recruit millennials, according to the LMI report.

How employers can get better at attracting more young people to bolster an aging workforce is “a large focus,” Splinter notes, adding there need to be ramped up efforts to recruit them.

Beyond better work-life balance, some other trends in the research look promising when it comes to marketing towards Milennials. For example, Splinter says the most common method of compensation for truck drivers is mileage pay but now there’s a trend towards hourly pay.

“Part of that is with the younger generation coming in, they want predictability in their pay,” Splinter says. But the more mature drivers still prefer the mileage pay, meaning fleets are now looking at hybrid models around how they compensate — “and that requires some flexibility within their internal operations.”

The report adds that the issues facing HR professionals in the industry were also “topped off with more complex compliance issues.”

“With everything going on with our labour shortages, with our HR people pushed to the max on doing their job, the increased compliance requirements particularly with our federally regulated employers with the Canada Labour Code — this is adding to the stress with our employees,” Splinter says.

Though she notes they are supportive of modernizing the Labour Code, the industry wants to make sure the changes “are reasonable as we transition to ensuring that our employers are compliant, and that there’s also some flexibility and a recognition of the nature of our work.”

“We are having consultations with Labour Canada — we’re just putting all our concerns on the table,” Splinter says. “They are aware of the labour shortages and the stress that’s happening within the workplace.”

The LMI report states that the impact of Canadas critical driver shortage are felt beyond the trucking industry, as the trucking sector carries an estimated $550 billion worth of goods purchased by Canadians and more than $300 billion worth of Canadian goods destined to export markets; generates well-paying middle-class jobs, employing more than 650,000 workers; connects consumers, businesses and international markets; is integral to Canadas nine other critical infrastructure sectors; and is a key element in the country’s intermodal transportation network and provides an essential contingency during disruptions in other transportation modes, for example the railway.

There are a lot of moving parts when it comes to finding badly needed solutions to the driver shortage, but Splinter notes there’s one over-arching approach there’s no doubt about.

“Looking at it from all angles,” she says. "That’s really what we need to do.”

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